Hearing on (1) Draft Bill to Enhance SGLI; 

(2) P.L. 109-13, Traumatic Injury Protection 

Provisions; (3) H.R. 1618, The Wounded Warrior Servicemembers Group Disability 

Insurance Act of 2005

Hearing

before the

Committee on 

Veterans’ Affairs

House of Representatives

Subcommittee on Disability 

Assistance and Memorial Affairs

one hundred ninth congress

first session

June 16, 2005

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-11

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22-365.PDF
Committee on Veterans’ Affairs

Steve Buyer, Indiana, Chairman

Michael Bilirakis, Florida Lane Evans, Illinois, Ranking

Terry Everett, Alabama Bob Filner, California

Cliff Stearns, Florida Luis V. Gutierrez, Illinois

dan burton, Indiana Corrine Brown, Florida

Jerry Moran, Kansas Vic Snyder, Arkansas

richard H. baker, Louisiana Michael H. Michaud, Maine

Henry E. Brown, Jr., South Carolina Stephanie Herseth, South 

Jeff Miller, Florida Dakota

John Boozman, Arkansas Ted Strickland, Ohio

Jeb Bradley, New Hampshire Darlene Hooley, Oregon

Ginny Brown-Waite, Florida Silvestre Reyes, Texas

Michael R. Turner, Ohio Shelly Berkley, Nevada

 Tom Udall, New Mexico

James M. Lariviere, Staff Director

Subcommittee on Disability Assistance

and Memorial Affairs

Jeff Miller, Florida, Chairman Shelley Berkley, Nevada, 

Jerry Moran, Kansas Ranking

Jeb Bradley, New Hampshire, Vice Chairman Tom Udall, New Mexico

Ginny Brown-Waite, Florida Lane Evans, Illinois

 

PAIGE MCMANUS, Subcommittee Staff Director

(II)
CONTENTS

June 16, 2005

 Page

Hearing on (1) Draft Bill to Enhance SGLI; (2) P.L. 109-13, 

 Traumatic Injury Protection Provisions; (3) H.R. 1618, The

 Wounded Warrior Servicemembers Group Disability Insur-

 ance Act of 2005 ....................................................................... 

OPENING STATEMENTS

Hon. Jeff Miller, Chairman, Subcommittee on Disability Assist-

 ance and Memorial Affairs ...................................................... 

Hon. Shelley Berkley, Ranking Democratic Member ................ 

Hon. Lane Evans .........................................................................

Hon. Ginny Brown-Waite ............................................................

Hon. Tom Udall ...........................................................................

Witnesses

Hon. Rick Renzi, 1st District of Arizona ......................................

Prepared statement of Mr. Renzi ................................................

Lastowka, Thomas, Director, VA Regional Office and Insurance

 Center .......................................................................................

Prepared statement of Mr. Lastowka .........................................

Jones, Steve, Principal Deputy Assistant Secretary of Defense

 for Health Affairs, Department of Defense ............................

Prepared statement of Dr. Jones ................................................

Melia, John, Executive Director, Wounded Warrior Project .....

Prepared statement of Mr. Melia ................................................

Bollinger, John, Deputy Executive Director, Paralyzed Veterans

 of America ................................................................................

Prepared statement of Mr. Bollinger .........................................

McDonald, Bob, Executive Director, Life/Annuity Sales, USAA

Prepared statement of Mr. McDonald ........................................

STATEMENTS FOR THE RECORD

Lawrence, Brian, Assistant National Legislative Director, 

 Disabled American Veterans ..................................................

 1

1

2

4

4

53

5

54

12

56

14

62

22

70

25

82

27

98

77

(III)
Norton, Robert, Deputy Director, Government Relations, Mili-

 tary Officers Association of America ......................................

Rieckhoff, Paul, Executive Director and Founder, Operation 

 Truth ........................................................................................

INFORMATION FOR THE RECORD

Draft Legislation the Servicemembers’ Group Life Insurance 

 Enhancement Act of 2005 .......................................................

H.R. 1618, the Wounded Warrior Servicemembers Group Dis-

 ability Insurance Act of 2005 ..................................................

92

104

30

35

Page

(IV)
HEARING ON (1) DRAFT BILL TO ENHANCE SGLI; (2) 

P.L. 109-13, TRAUMATIC INJURY PROTECTION PROVISIONS; (3) H.R. 1618, THE WOUNDED WARRIOR

SERVICEMEMBERS GROUP DISABILITY 

ASSISTANCE ACT OF 2005

Thursday, June 16, 2005

(1)

U.S. House of Representatives,

Subcommittee on Disability Assistance and

Memorial Affairs,

Committee on Veterans’ Affairs,

Washington, D.C.

The Subcommittee met, pursuant to notice, at 1:00 p.m., in Room 

334, Cannon House Office Building, Hon. Jeff Miller, Chairman of 

the Subcommittee, presiding.

Present: Representatives Miller, Bradley, Brown-Waite, Berkley, 

Udall, and Evans.

 Mr. Miller. The Subcommittee will be in order.

 Today we are going to take testimony on several legislative proposals to the Servicemembers’ Group Life Insurance Program, as well as 

a new Traumatic Injury Protection Program authorized in H.R. 1268, 

the War Supplemental, and H.R. 1618.

 As the witnesses are aware, the Supplemental included provisions 

which made changes to VA’s insurance program for active duty servicemembers. As the authorizing Committee with jurisdiction over 

SGLI, this Committee should have had an opportunity to meet and 

consider those proposals before the House and Senate passed the 

Supplemental.

 However, it didn’t occur, so we are here today to review the provisions and consider changes where they may be appropriate. With the 

exception of the Traumatic Injury Protection program, which I will 

explain in a minute, the insurance changes made by the Supplemental are set to expire on September 30th of this year.

 The draft bill on the agenda today does a couple of things.

 Number one, it makes permanent the maximum increases in coverage for both Servicemembers’ and Veterans’ Group Life Insurance 

from $250,000 to $400,000. It also requires the military service secretary concerned to notify a servicemember’s spouse or unmarried 
2

servicemember’s next-of-kin in writing if the servicemember declines 

coverage or chooses an amount less than the maximum.

 Further, the spouse would be notified if a beneficiary designation 

is someone other than that spouse or a child, and finally, makes permanent the increments of SGLI coverage servicemembers may elect 

from $10,000 to $50,000.

 As many of you are aware, the notification language was included 

in H.R. 2046, which the Committee marked up May 11th and the 

House passed on May 23rd of this year.

 The Traumatic Injury Protection program established by the Supplemental provides lump sum financial assistance in the amounts 

ranging from $25,000 to $100,000 to servicemembers who suffer certain traumatic injuries.

 The servicemember would pay premiums for this additional insurance protection, but could not opt out of the program.

 Representative Rick Renzi introduced somewhat similar legislation in the House, H.R. 1618, and I am pleased he is with us today to 

discuss his bill and the new program as a whole.

 This Subcommittee’s opportunity comes today to address any outstanding issues regarding these provisions. Prior to passage of the 

Supplemental, Ranking Member Berkley and I met and expressed 

our concerns to representatives of the Department of Veterans Affairs and DoD and look forward to hearing from the witnesses here 

this afternoon.

 I now recognize our Ranking Member for her opening remarks.

 Ms. Berkley. Thank you, Mr. Chairman. I appreciate you holding 

this hearing to review recent changes in the SGLI program. While 

I support many of the provisions in the recently-passed Emergency 

Supplemental, I am concerned that several sections may negatively 

impact servicemembers and their families.

 The requirement that a married servicemember purchase the maximum amount of life insurance unless the spouse consents makes no 

exception for spouses who are estranged, separated, or in the process 

of divorce. A servicemember who is going through a divorce should 

not have to ask his or her spouse to approve their life insurance election. I agree with the testimony of PVA and the other service organizations who believe the spousal consent should be eliminated.

 I am also concerned that under the “notice” provision a servicemember could feel pressured by their spouse to avoid naming the 

servicemember’s children as beneficiaries, leaving them without financial assistance if he or she dies. A one-size-fits-all approach is not 

appropriate, sadly, for the complex and countless family responsibilities of today’s servicemembers.

 I support the provision in the draft bill to require notification only 

if someone other than a spouse or child is named as a beneficiary.

 I also have concerns, Mr. Chairman, with regard to the $150,000 
3

life insurance provided to veterans only while they are serving in a 

combat zone. There are risks associated with insurance being provided when servicemembers are only in particular locations around 

the world.

 For example, servicemembers who are aware that the Department of Defense will provide coverage in combat may decline SGLI

coverage and leave their families unprotected if a death occurs in the 

wrong place. Payment of premiums by the Department of Defense 

while servicemembers are in combat would encourage them to participate in the SGLI program, but does not create the risk of inconsistent coverage.

 However, any decision concerning assistance with the cost of premiums should be made by the Armed Services Committee. I would 

support action by the Committee to provide such assistance.

 I think we need to remember that SGLI is not a government benefit. It is insurance paid for by the men and women who serve this nation. I am uncertain as to the purpose of the traumatic injury policy 

established by the Emergency Supplemental. I am hoping that the 

witnesses will help me better understand the intent of the policy. Is 

it intended to compensate the veteran for the traumatic loss of a limb 

or sensory organ or to compensate the veteran and his family for the 

expenses related to catastrophic disabilities incurred or aggravated 

by military service? If it is for the loss of a limb, shouldn’t this be the 

responsibility of the Government as stated by DAV and PVA, rather 

than paid by servicemembers through insurance? If the intent is to 

compensate the veteran and his family for additional expenses, why 

is the benefit limited to only certain traumatic injuries and no other 

cause, excluding equally or more severely disabled veterans.

 Let me give you an example to help explain. My understanding is 

that if two servicemembers are serving in Iraq, in the same military 

operation, and one goes into a coma due to a shrapnel head injury 

and the other goes into a coma due to a cardiac arrest brought on by 

the trauma of the moment, the servicemember with the shrapnel will 

receive a payment under the law but the servicemember with the 

cardiac arrest would not. This disparity of treatment I believe would 

be avoided under the Renzi bill.

 While it is unclear how the VA will interpret this statute, under the 

conditions listed in the law, it appears that veterans with similar rehabilitation needs will not be similarly eligible to obtain the proceeds 

of the policy they are required to purchase.

 According to Mr. Rieckhoff’s testimony, Mr. Acosta lost a hand in 

combat and needed months of rehabilitation and it appears that he 

would qualify for the benefit. However, Mr. Jones, who spent more 

than a year at Walter Reed for rehab of a spinal cord injury which 

left him severely disabled but not paralyzed, does not appear to be 

eligible.
4

 I support USAA’s recommendation that the benefits should be 

commensurate with the anticipated rehabilitation time, and not on a 

finite list of specific conditions.

 As you can see, there are still numerous questions as to how this 

law will affect servicemembers. I want to thank all of you for being 

here, and I look forward to hearing your testimony. And Mr. Renzi, 

it is very nice to see you there.

 Mr. Miller. Thank you, Ms. Berkley. Mr. Evans?

 Mr. Evans. Thank you, Mr. Chairman, and I salute you and Ranking Member Berkley for the hard work you have done coming up with 

ways to deal with so many different problems that we have in this 

insurance program.

 It’s not easy to understand. A lot of people who have worked hard 

on it and have been experts in it don’t understand it, it’s clarity in 

terms of where we are going.

 I just want to thank you for taking that opportunity. Unfortunately 

many severely-wounded service men and women requiring long-term 

rehabilitation will not get payments under current law.

 I hope that today’s hearing will assure that the United States is 

effectively meeting the needs of our armed forces personnel who have 

suffered severe disabilities during military service.

 I hope that we will all work to improve the benefit for the families 

who have died.

 I look forward to hearing from our witnesses and for their testimony as well. Thank you, Mr. Chairman.

 Mr. Miller. Thank you, Mr. Evans.

 Ms. Brown-Waite, do you have anything to add to the discussion 

before we begin testimony?

 Ms. Brown-Waite. Yes, sir.

 Mr. Miller. Since Mr. Bradley has yielded, you are recognized.

 Ms. Brown-Waite. Thank you. First of all, I want to commend you 

for holding this hearing to discuss legislation that is very important 

to our service men and women. The House and Senate recently came 

together to make needed changes to our servicemember and veterans’ 

health insurance coverage in the Emergency Wartime Supplemental 

passed in May. However, many of these changes actually will expire 

in September, 2005, and our Subcommittee must act to make them 

permanent.

 Among the most significant of these changes are revisions to the 

Servicemembers’ Group Life Insurance and Veterans’ Group Life 

Insurance. The Chairman’s draft legislation before us today would 

make permanent the maximum coverage increases in these programs 

from $250,000 to $400,000. The increase certainly better supports 

newly-bereaved families faced with often unexpected expenses.

 As we continue to fight the War on Terror to keep America free, 

our troops have experienced losses that break our hearts. Increas-
5

ing the maximum life insurance coverage available gives our servicemembers and veterans a peace of mind that their loved ones will be 

provided for in the event of a tragedy.

 I know I lost another servicemember just earlier this week. He 

lives in the same county -- or his parents live in the same county as 

I come from. Certainly families deserve nothing less and I certainly 

look forward to hearing from Congressman Renzi and other interested groups who are here today on the legislative proposals before us 

again, and I want to thank you for holding this hearing.

 Mr. Miller. Thank you, and without further ado, we will recognize our first witness, the Honorable Rick Renzi, who introduced H.R. 

1618 on the 13th of April.

 Rick was elected to Congress in 2002 and represents the first district of Arizona. He grew up in Sierra Vista, Arizona, where his father, a retired Army major general, served at Fort Huachuca.

 Rick, welcome to the Committee. You may begin.

STATEMENT OF HON. RICHARD RENZI, A REPRESENTATIVE

 IN CONGRESS FROM THE STATE OF ARIZONA

 Mr. Renzi. Thank you, Mr. Chairman, Ranking Member Berkley, 

and members of the Subcommittee. I appreciate the opportunity to 

testify before you. I will go with my prepared comments and then ask 

any kind of questions or comments we could get into that I think will 

drill down into the heart of the matter.

 I do appreciate you all having this Committee -- essentially establishing this Committee first of all, and focusing on the disability 

benefits for our veterans.

 The new program, which was recently introduced as part of the 

Emergency Wartime Supplemental Act of 2005, will give disabled 

servicemembers a vital economic boost when they need it most.

 In April of this year I introduced H.R. 1618, the Wounded Warrior 

Servicemembers Group Disability Insurance Act of 2005. This legislation, which in part was passed into law, gives our servicemembers 

the opportunity to purchase disability insurance for about a dollar a 

month.

 This new Traumatic insurance protection program will provide 

the servicemember against the economic consequences of both severe 

disabilities suffered on active duty and the expenses incurred while 

recuperating for those disabilities. This program greatly assists the 

servicemembers and their families during a real critical time and 

they also transition back into full employment.

 Earlier this year I had the opportunity to meet with Sergeant Ryan 

Kelly from Prescott, Arizona, who told me of the need for the disability insurance program. In 2003, Sgt. Kelly was returning from 

a meeting he had had in Iraq where he had met to help rebuild the 
6

schools and the hospitals in the country of Iraq, and on the way back 

his convoy was ambushed by insurgents and an explosive device blew 

off his right leg below his knee.

 Following this injury, Sergeant Kelly recovered for nearly a year 

at Walter Reed Army Hospital, where he learned to walk with a prosthetic leg. Despite his injuries and long recovery, Sergeant Kelly explained to me that he was lucky during his recuperation his extended 

family had the means to pay for all the unforeseen expenses related 

to his hospitalization, and yet, however, many of his servicemembers 

are not so fortunate.

 Hospitalization often requires that the servicemember’s family 

leave work for an extended period of time in order to be with their 

loved one. Many times, particularly within our reserve units men 

and women are the primary wage earner and their families are moving to Washington, D.C. to spend three and four or five, six months 

with these folks. They are incurring hospital expenses, meal expenses, travel expenses -- never mind the loss of the income that they left 

from the job that they took place.

 I know that many of you on Christmastime went and visited many 

of the servicemembers over at Walter Reed and saw this for yourself, 

and during this recuperation period, our boys and girls are suffering 

with the mounting costs of these debts and these bills, and so it is at 

this time most that many times charitable organizations will kick in, 

including the Department of Defense, in trying to do a small amount 

or a limited amount that they can to help offset some of these costs.

 But my intent of this legislation was to provide an immediate payment of $50,000 for the servicemembers and their families to help 

with this financial burden with this recovery, with these expenses, 

and with this full transition back as a full and complete wage-earner 

in their community, in their society and in their family.

 A quick and substantial insurance payment to an injured servicemember eases their financial burdens and allows them to focus on 

healing and rehabilitation, both physical as well as mental.

 Some veterans’ organizations have stated their opposition to this 

disability insurance program, because they have said publicly that 

they believe that this program was enacted to replace either existing 

or future veterans’ benefits programs. I wish to state in the strongest 

terms possible that this program should not be seen as a benefit. It 

is simply an insurance program paid for by the servicemember to 

provide economic protection, and by no means should this insurance 

program be viewed as a replacement to VA benefits, but rather as an 

additional means by which servicemembers may protect themselves 

and their families from the inherent risks of military service.

 It is important to note that while the servicemembers’ group life 

insurance program has provided thousands of military families economic protection after the death of a loved one, it has not replaced VA
7

survivor benefits. This new traumatic insurance program should be 

viewed in the same way -- an insurance program to better protect insurance members and their families from foreseeable yet unexpected 

tragedies. I am very pleased Congress acted so quickly to establish 

this program. However, I believe that in the future Congress needs 

to pass legislation to provide expanded benefits and funding to make 

permanent this kind of protection for the members of our armed forces

 Medical technology has made great advancements, and in particular when our soldiers are wounded on the battlefield, they no longer 

bleed out. They are saved by our medic corps. Yet they regrettably 

come back to the States facing much severe injuries, and I hope that 

Congress will act and allow in working with the Department of VA

the latitude to establish and insurance program that I am hopeful 

will begin within the next six months that will cover the most severely injured of our servicemembers.

 Mr. Chairman, I realize I am out of time, so let me just say, and 

shorten my -- 

 Mr. Miller. We just gave you some more time. Go ahead.

 Mr. Renzi. Gave me a little more time. Thank you.

 Let me say I am grateful that you would hold this hearing. I

am mostly grateful for the service of the citizens who volunteer who 

are patriots, who have given the new battlement, the new weaponry, 

and particularly the heinous devices that our enemy is using against 

them, in particular in this war in Iraq, that in the future when we 

go to war, no longer do we expect division against division, armored 

division against armored division.

 We do expect this terrorist type of activity to continue, and as we 

look at the modernization of warfare, the modernization of this evil 

brought against our men and women, we need to prepare those benefits to fit that type of threat.

 Again, I know that you all support and want to find the best way to 

make this work. I apologize for this not coming before the Committee 

earlier. My intent was that it would. Certainly given the fact that 

you have the new Committee in place, it was something that came 

over from the Senate and was funded through the wartime supplemental.

 Sir, I thank you for the time today to be with you.

 [The statement of Hon. Rick Renzi appears on p. 54]

 Mr. Miller. Rick, thanks very much.

 Very quickly, your bill gives the servicemember an opportunity 

to opt out of the program. The program that was established by the 

Supplemental does not.

 Do you have an opinion as to whether or not it should be mandatory 
8

enrollment?

 Mr. Renzi. Yes, sir. Mr. Chairman, thank you for that point.

 I sold disability insurance prior to coming into Congress. I never 

anticipated that the law would obligate or would mandate that an 

individual had to pay this, that he had to take the money out of his 

paycheck and pay this benefit.

 Now right now it is very small and it is reasonable to where you 

could afford the monthly premium, but in the future, 20 years from 

now, when men and women are continuing to protect this country, 

should the Federal Government be involved in mandating what 

comes out of their pay in order to pay their disability?

 And, sir, if I can follow up further, as to Ms. Berkley’s point, should 

also, as you look at this, should you also allow servicemembers’ families to pay this benefit if they want, so that if a person does opt out, 

should there be a notice that then goes to the family? And I don’t 

want to get you into that quagmire, but I believe that you don’t -- 

we don’t mandate that an individual must take part of his pay, no 

matter how small it is, and that they must use it for their insurance 

payment.

 At that point, is it necessarily an insurance benefit as much as it is 

a mandatory kind of a benefit?

 Mr. Miller. Thank you very much. I have no further questions. 

Ms. Berkley?

 Ms. Berkley. Thank you, Mr. Renzi, for your testimony.

 In your testimony you indicated that Public Law 109-13 gives the 

Department of Veterans’ Affairs wide latitude to cover all severely 

disabled servicemembers. However, the law itself prohibits payment 

for any disability which is not due to traumatic injury.

 Would you favor -- and if you recall my opening statement -- 

 Mr. Renzi. Yes, I do.

 Ms. Berkley. -- two servicemembers serving side by side, one gets 

their leg blown off, the other one has a heart attack -- same military 

action.

 Would you favor amending the current law to provide coverage for 

all severely disabled veterans based upon the estimated time of rehabilitation, as recommended by the USAA?

 Mr. Renzi. Thank you, Ranking Member Berkley.

 I -- in my language, which differs from the Senate version that 

was passed, I focused on the fact the VA, working with the doctors, 

would look at true disability coverage. Disability coverage used to 

mean that you had loss of income and loss of time on the job, and the 

payout had to do with that amount of time that you missed.

 What came out of the Senate, Ms. Berkley, was really geared more 

towards Workers’ Compensation law that said, well, if you lose this, 

then you get this. And that is not where I was going with this.

 Mine was to allow the VA to work with the Wounded Warrior 
9

groups and our servicemen and our doctors to find that balance of, 

“Look, this guy is going to -- or this gal is going to be in the hospital 

for this amount of time.” These are typically actuarially the type of 

expenses that you can traditionally timeline, or you could line out, 

and that this is the kind of benefit they should get.

 When you get into a situation of “This arm is worth this much 

money,” I ask you, and I know you are with me on this, if it is a dentist who is right-handed and he uses his right arm, isn’t that worth 

more than a PE coach who loses his right arm? And so you get into 

these disparities, and this is one of the problems with Workers’ Compensation law.

 So I like the idea of allowing the VA to work with the soldiers and 

work with the groups to come up with a combination of compensation 

as it relates to time and expense and debt that is incurred as well as 

the transitional costs that you see of bringing a person back into a 

wage earner status.

 Ms. Berkley. So you are not in favor of a laundry list of disabilities 

that would trigger the law?

 Mr. Renzi. That was the Senate version, ma’am. And I agree with 

you that I think that needs to be refined. That is why I like what the 

VA did with it. When the law came over to VA, they said, they added 

the word, well, “or” you could look at a time type of a basis.

 Ms. Berkley. Okay. Thank you very much.

 Mr. Renzi. You’re welcome, Shelley.

 Mr. Miller. Mr. Bradley.

 Mr. Bradley. Thank you very much, Mr. Chairman. Mr. Renzi, 

thank you. Welcome back to the Committee. You have been a longtime advocate for veterans, and certainly those of us other Members 

of Congress who have seen your work on veterans know it is exemplary, and I thank you for that.

 Mr. Renzi. Thanks, Jeb.

 Mr. Bradley. Just in looking at your testimony and briefly the testimony of paralyzed veterans, and perhaps they can answer this too, 

is as I understand your bill, Rick, this would be over and above any 

benefit that exists today, is that correct -- or certainly that is your 

intention?

 Mr. Renzi. Congressman, I am grateful you drilling on this for 

me. I was a little taken back. Here we are trying to add a voluntary 

insurance program, not a VA benefit, that would fit the new warfare 

that we see and the new devices we see used against our men and 

women.

 In trying to come up with an idea, and having a history of selling 

insurance in the past, particularly disability insurance, this is a way 

for them to buy something or their loved ones to buy something -- 

just like the loved ones bought body armor, just like the loved ones, 

their families, bought phone cards. Loved ones could buy a disability 
10

policy that would help offset some of the expenses and the debt and 

the transitional costs back into society.

 It is something I am talking about that is really outside the system. 

It is not necessarily a direct cost, direct VA benefit it would actually 

have jurisdiction over. I am talking about a cost that is outside. I am 

talking about McDonald’s hamburgers for your kids that day while 

your husband or wife is at Walter Reed.

 So the mechanism to try and fix that, I thought, would be a good 

disability policy, and that is why I am taken back by the thought that 

this would actually try and replace or reduce benefits in the future.

 Mr. Bradley. Which I think both you and I would be opposed to.

 Mr. Renzi. Absolutely.

 Mr. Bradley. If it reduced other benefits.

 Mr. Renzi. I would vote against it myself.

 Mr. Bradley. Rick, have you had this bill scored? Obviously there 

should be no impact to the VA on it, but I guess what I am curious 

about is the dollar per month or $12 per year, if you have actuarially 

computed whether that would pay the expected costs of the $50,000 

disability benefit?

 Mr. Renzi. Congressman Bradley, I appreciate it. Obviously during 

wartime the costs of repayment -- the cost that the DoD would incur 

for the premiums that have to be paid -- would be much higher. In 

peacetime, it would be much less.

 We have looked at it in both scenarios, and I would offer to you that 

under the current scenario that we see in Iraq, we would be looking 

at an average of about 500 men or women that would qualify, which 

would equate to about a 25 million dollar premium that DoD would 

help offset during wartime.

 During peacetime -- and that would be 500 people, roughly -- during peacetime we would estimate, and it kind of goes to the heart of 

what the Ranking Member was talking about, we would probably see 

about 200 training injuries that would qualify, and that would probably be cut substantially, more than half, somewhere in the neighborhood of $12 million.

 So, depending on the scenario, you could imagine it would score 

differently.

 Mr. Bradley. Thank you. Thank you, Mr. Chairman.

 Mr. Renzi. Thank you, sir.

 Mr. Miller. Mr. Evans.

 Mr. Evans. I know my colleague has spent a lot of hours on this issue, and I appreciate that.

 I would like you to clarify what you mean by “voluntary.”

 Mr. Renzi. Clarify the -- 

 Mr. Evans. The term “voluntary program” -- 

 Mr. Renzi. Balance area?

 Mr. Miller. Voluntary.
11

 Mr. Renzi. Oh, voluntary, yes. In my bill, Mr. Evans, I wanted our 

service men and women to be able to opt out, and therefore the opt 

out feature makes it voluntary, whereas the existing policies that 

you see that have opt out features in them are voluntary programs 

that allow the individuals to get in or get out, and that the Federal 

Government does not mandate that you have to use this type of pay 

taken out of your salary to pay for that kind of a benefit.

 Mr. Evans. Well, to take it just one step further, there have been 

veterans’ programs that have been voluntary in the past. When I got 

sworn into the Marine Corps, the second day they deal with this issue 

of volunteering or taking out voluntary, kind of, variety of benefits.

 What I am trying to say is that how is this a meaningful choice 

when, you know, you have had the day to digest going into the Marine 

Corps for a few years and it reminds me of the bonds drives that the 

Marine Corps initiates. The first sergeant comes out and says, “Well, 

this is strictly voluntary that” -- 

 Mr. Renzi. But you will buy it.

 Mr. Evans. Right, and so he says, “Who are the communists in this 

platoon who did not want to buy health insurance?” and stuff like 

this. So I am worried about a guy goes in and what do they know, 

going through the likelihood of that pressure. 

 Mr. Renzi. On the read-in program, whether they are educated 

enough on it to find out whether it is there or not?

 I agree with you. There would have to be some sort of an absolute, 

maybe sign-off. Maybe you are in, and the only way to get out is that 

you sign off. It is up to you all, sir. I don’t mean to impinge on you, 

but you have to sign out to opt out.

 I was trying to say in the future, as you all look 20 years from now, 

if the premiums, and we all know insurance premiums go through 

the roof, if it turns out to be a $50 a month premium, do we really 

want to legislate that they have to pay for that?

 By not having the opt out version in it, it begins to head down the 

road of being more seen as a benefit than an optional type of program, 

insurance program, and that is really what I am trying to avoid.

 Mr. Evans. Well, thank you.

 Mr. Renzi. Thank you, sir.

 Mr. Miller. Mr. Udall.

 Mr. Udall. I don’t have a question but I like to see my friend, Congressman Renzi, staying involved in veterans’ issues and appreciate 

his testimony here today. Thank you.

 Mr. Renzi. Thank you, Mr. Udall, appreciate your friendship.

 Mr. Miller. Thank you very much, Rick. Obviously, as has been 

said already, your commitment to servicemembers and veterans does 

not go unnoticed and we appreciate you appearing before the Subcommittee today and sharing your views on this particular piece of 

legislation.
12

 Mr. Renzi. Thank you, Mr. Chairman.

 Mr. Miller. Thank you very much.

 If I could, would the second panel come forward, and as you do, and 

we are getting set up, let me kind of lay out where we stand legislatively at this point.

 Sometime between probably 2:00 and 2:30, we are going to be called 

to a series of votes, probably closer to 2:30 but you never know. It will 

be a 15, four 5’s, possibly a motion to recommit, final passage, and 

two more 5s. So what we are going to try to do, if we can, is to dispense with all of the nice introductions and remind the Members here 

in our questioning, if we could keep it succinct if possible, remind the 

folks testifying today that your entire statement will be entered into 

the record and we would ask that you do summaries if you will, so 

that we don’t have to recess and come back. We would like to finish 

everything, if possible, before we go over to the vote, so what I am 

going to do is just introduce Tom Lastowka, who is here from the VA

Regional Office in Insurance Center in Philadelphia, to begin.

STATEMENTS OF THOMAS LASTOWKA, DIRECTOR, VA RE-

 GIONAL OFFICE AND INSURANCE CENTER; ACCOMPA-

 NIED BY STEVE WURTZ, DEPUTY ASSISTANT DIRECTOR

 FOR INSURANCE; STEVE JONES, PRINCIPAL DEPUTY AS-

 SISTANT SECRETARY OF DEFENSE FOR HEALTH AFFAIRS,

 DEPARTMENT OF DEFENSE; ACCOMPANIED BY COLONEL

 S. VIRGINIA PENROD, DIRECTOR, MILITARY COMPENSA-

 TION, OFFICE OF THE SECRETARY OF DEFENSE (PERSON-

 NEL AND READINESS), DEPARTMENT OF DEFENSE

STATEMENT OF THOMAS LASTOWKA

 Mr. Lastowka. Mr. Chairman, Ms. Berkley, other members of the 

Committee, before I begin my testimony -- 

 Mr. Miller. You need to turn your microphone on, too, please, sir.

 Mr. Lastowka. Before I begin testimony today, I would like to introduce Mr. Steve Wurtz, who is accompanying me today. I am the 

Director of the VA Regional Office and Insurance Center in Philadelphia. As such, I am the Director of the VA Insurance Program.

 Mr. Chairman, if you will allow, I will summarize my testimony 

and ask that the complete testimony be placed into the record.

 Mr. Miller. Without objection.

 Mr. Lastowka. First, I would like to comment on H.R. 1618, the 

Wounded Warrior Servicemembers Group Disability Insurance Act 

of 2005, which would create a servicemembers group disability insurance program to provide insurance benefits to servicemembers who 

incur certain severe disabilities.

 While we laud the purpose of this proposal, we cannot support H.R. 
13

1618 because it would largely be duplicative of this new servicemembers group life insurance traumatic injury coverage enacted into law 

May 1, 2005, as Public Law 109-13.

 I would also like to comment on the draft bill entitled “Servicemembers Group Life Insurance Enhancement Act of 2005.” Section 2 of 

the draft bill would amend Title 38 to increase the maximum amount 

of SGLI and VGLI insurance to $400,000, effective October 1st, 2005, 

with respect to death occurring on or after that date.

 This provision would extend the increase to $400,000 made by 

Public Law 109-13, which will terminate on September 30, 2005. VA

supports the enactment of Section 2 of this bill because it provides 

opportunities for servicemembers to increase insurance protection for 

their family.

 Section 3 of this bill, effective October 1, 2005, would require 

branches of the service to make a good faith effort to notify spouses or 

the next-of-kin when the servicemember declines or makes changes 

to their SGLI coverage. Spouses must also be notified if the members 

named a beneficiary other than the spouse or a child.

 Finally, when a servicemember marries, the branch of service must 

notify the new spouse of the servicemember’s SGLI elections, and if 

they have designated a beneficiary other than the spouse or a child. 

But failure to notify, failure to provide timely notification will not affect the validity of any option elected by the insured.

 Because this bill does not extend the current law that goes into effect September 1, 2005, but instead defines a new program that starts 

when the current program expires on September 30, 2005, there are 

a number of potential difficulties and administrative challenges that 

would unnecessarily burden both the member and the government.

 For example, a member who elects less than the maximum coverage under the current law and whose spouses consent, would once 

again have to fill out the paperwork required to elect less than the 

maximum coverage, and then the government would be required to 

notify the spouse once again.

 The administration would like to work with Congress to ensure 

that these issues are addressed.

 We note, as well, that under Title 38, SGLI coverage terminates 

120 days after release from active duty. Title 38 also states that 

any designation of a beneficiary or beneficiaries for Servicemembers’ 

Group Life filed with a uniformed service until changed shall be considered the designation of a beneficiary under VGLI, but not for more 

than 60 days after the effective date of the insured’s VGLI.

 It is unclear whether the notification provision of Section 3 of the 

draft bill, which refers to the member of a uniformed service, would 

apply to any change in the beneficiary designation that the former 

servicemember would make within that 120 day discharge period, 

but prior to cessation of SGLI coverage, or that a VGLI insured would 
14

make within 60 days period, as referenced in Section 1977(d).

 We also note that if Section 3 were applicable to VGLI beneficiary 

designations, it would be difficult to implement. SGLI, Servicemembers Group Life Insurance, does not maintain marital data of the 

insured.

 Finally, I would like to comment on Section 1032 of Public Law 

109-13, which creates a program that provides insurance benefits for 

servicemembers under certain traumatic injuries.

 Traumatic Injury Program provides automatic insurance for any 

SGLI who is insured, suffers from a traumatic injury as prescribed by 

the Secretary of Veterans’ Affairs, in collaboration with the Secretary 

of Defense.

 Under this program payments will be made in accordance of a 

schedule prescribed by the Secretary of Veterans’ Affairs based on 

the severity of the condition and in an amount not less than $25,000 

or more than $100,000. The maximum payable for all injuries resulting from the same traumatic event is $100,000, and if a servicemember suffers more than one loss as a result of the traumatic injury, 

payment will be made in accordance with the prescribed schedule.

 Premiums for the disability insurance coverage will be deducted 

from the basic pay and its benefit is effective December 1.

 We welcome the addition of this valuable benefit to the SGLI benefits currently available. We believe the law will help reduce the financial burden and mental strain on servicemembers following traumatic and often life-changing injuries.

 This concludes my remarks and I want to thank the Committee for 

the time and the opportunity to present our views.

 [The statement of Thomas Lastowka appears on p. 56]

 Mr. Miller. Thank you very much. We will hold our questions until 

the next presenter presents, and I would ask -- Dr. Steve Jones is appearing on behalf of DoD.

STATEMENT OF STEVE JONES

 Mr. Jones. Thank you, Mr. Chairman, and I would like to recognize 

Colonel Penrod, who is with me here today to help answer any specifics that you might ask later.

 Mr. Chairman, members of the distinguished Subcommittee, thank 

you for the opportunity to be here today. It is my privilege to discuss 

disability compensation and survivor benefits and to highlight the 

Department of Defense initiatives in providing support to the severely injured.

 I have submitted a more detailed written statement for the record, 

Mr. Chairman.
15

 First, we applaud Congress for providing the new Traumatic Injury 

Protection Insurance. The Department is completely satisfied with 

the existing statute and would not favor any change that provided 

for a maximum amount of less than the current $100,000. We are 

already working closely with the Department of Veterans’ Affairs to 

implement this new program.

 Second, we are pleased with the increase of the immediate death 

gratuity payment of $100,000 for survivors of those whose death is 

in a designated combat operation or combat zone or occurred while 

training for combat or performing hazardous duty.

 And third, the increase to the maximum amount of Servicemembers Group Life Insurance coverage to $400,000, and provision that 

the Department will pay or reimburse the premiums for members 

who are deployed in a designated combat zone for $150,000 of SGLI

coverage.

 These increases recognize the direct sacrifice of life of military 

members in the service of their nation. We urge your Committee to 

propose and pass legislation to make the SGLI increase permanent.

 To assist our severely wounded, the Department established the 

Military Severely Injured Center. And, Mr. Chairman, if you haven’t 

had a chance to go out and visit the center, which began operation 

February 1 of this year, I would encourage you to try to do so, and I

have got some brochures here that we would like to pass out for you 

to see.

 We are collaborating not only with the military services but also 

with other departments of the Federal Government, nonprofit organizations and corporate America to assist the deserving men and women and their families. Particularly successful has been the Center’s 

relationship with the VA in addressing and resolving specific VA benefits and health entitlement issues and concerns.

 The Department of Labor has also been very helpful as well as TSA

in transportation issues in getting those who are disabled back and 

forth for medical care.

 In conclusion, our objective is to ensure that we fully support our 

servicemembers when we send them in harm’s way, if they become 

severely injured, and that we properly support the families’ needs 

if a servicemember dies on active duty. We are very appreciative 

of the enhanced benefits in traumatic injury insurance provided for 

our members by Congress. We urge this Committee to carefully review and retain the underlying intent of Traumatic Injury Protection 

Insurance and to propose and pass legislation to make the SGLI increase permanent.

 Again, it is my privilege to be here today, and thank you for the 

opportunity to discuss these critical issues that are so important to 

our dedicated young men and women in uniform today. Thank you, 

Mr. Chairman.
16

 [The statement of Steve Jones appears on p. 62]

 Mr. Miller. If I could, Mr. Lastowka, just ask in regards to premiums and potential increases, I think right now the numbers, $16.25 a 

month, for $250,000 coverage -- do you expect increases to get to the 

$400,000 in coverage on SGLI?

 Mr. Lastowka. Yes, Mr. Chairman. The monthly premium is based 

on both the cost per thousand, and the total amount of the face amount 

of the insurance. Immediately we would expect the premiums to go 

from $16.25 per month to $26.00 per month, and that is simply to 

increase the premiums collected under the civilian experience.

 In the future there may be some pressure on premiums to be increased due to the fact that at $400,000 per death we will be drawing 

down our contingency reserves at a quicker pace.

 Mr. Miller. Do you think that will have any type of impact on the 

number of people who, because of going to $26 a month, on the number of people who would take the full benefit?

 Mr. Lastowka. So far we haven’t had that experience when we 

haven’t had that experience when we have had increases in SGLI

before and we’ve been able to maintain close. I would hope and expect there would not be any significant change based on that raise in 

premium.

 Mr. Miller. Dr. Jones, quickly, in the Traumatic Injury Program 

established in the Supplemental, the SECDEF will give a determination relating to all claims under the program.

 What happens if a servicemember is found by the Secretary to be 

ineligible for payment? Can they appeal the decision? If so, where do 

they go for an appeal?

 Dr. Jones. Mr. Chairman, I believe that we are still working that 

issue, at this point in time. Is that correct? Here we are talking 

about the increase -- 

 Mr. Miller. In the Traumatic Injury Program that we did with the 

Supplemental, and it was said that the Secretary of Defense would in 

fact adjudicate all the cases. If in fact a servicemember doesn’t like a 

decision, is there an appeals process that is established?

 Mr. Lastowka. Mr. Chairman, I believe that decision as to whether 

there was a traumatic injury under traumatic SGLI provisions would 

rest with OSGLI and the Secretary of VA. Normally -- 

 Dr. Jones. Mr. Chairman, normally, as you know, we are in favor of 

an appeals process and if you don’t mind we’ll like to get back for the 

record for you on specifically how that is going to evolve.

[In response to the request, the witness provided the following:

“An appeals process is an important aspect of any new program. 

To that end, the working group is working closely with the Vet-
17

erans Administration to develop an implementation plan, and 

we expect the appeals process to be considered as part of that 

effort.”]

 Mr. Miller. Very good. Ms. Berkley?

 Ms. Berkley. Thank you, Mr. Chairman, and thank you very much 

for your testimony.

 I think this is a question for both the VA and the DoD. Under 

the laws, a servicewoman who was estranged from her husband and 

the husband is living with another woman is required to obtain the 

consent of her husband in order to select and pay for less than the 

maximum SGLI amount. That doesn’t make any sense to me.

 Why does the administration insist that the servicewoman in this 

situation be required to obtain from her estranged husband permission to make financial decisions that are in her own best interest? I 

am concerned about the laudable goal but understand unfortunately 

that it doesn’t fit the tenor of the times and there’s a whole lot of different type of families out there nowadays.

 Mr. Lastowka. Ms. Berkley, under the provisions of 16 -- 

 Ms. Berkley. This is 109-13.

 Mr. Lastowka. Pardon?

 Ms. Berkley. This is 109-13, Public Law.

 Mr. Lastowka. That which has already been passed.

 Ms. Berkley. Yes.

 Mr. Lastowka. As I testified, under the provisions of 1625, I believe 

it is, there would be required notification rather than consent, and we 

are endorsing that change in the bill I’m sorry.

 Ms. Berkley. That’s all right. I get the gist of this. This woman 

doesn’t have to get her estranged husband’s consent. He is going to 

be notified but there’s no consent. Why do the notification - out of 

curiosity?

 Dr. Jones. Ms. Berkley, from the Department of Defense, our position, as you know, we want to try and protect the member but we also 

want to involve the family of the members because that’s so important, so, like you, we try to walk that fine line of what’s the appropriate action here, and that is what you are wrestling with.

 As you know, the Administration does support notification so that 

people can be informed, hopefully their loved ones can be informed, 

and of course earlier I think the administration supported the consent. However, upon reconsideration notification would be appropriate.

 Ms. Berkley. Okay. The current law has consent for amounts. Do 

you support the current law? I am a little confused about what you 

are saying, and I understand the fine line, but I am wondering why 

in fact current law says that you have to consent for the amounts. Do 

they have to consent to the amount or just be notified of it?
18

 Mr. Lastowka. Under the proposed law, Servicemembers’ Group 

Life Insurance Enhancements Act of 2005, that will require notification, not consent, and we are supporting -- 

 Ms. Berkley. The change.

 Mr. Lastowka. -- the Servicemembers’ Group Life Insurance Enhancements Act of 2005. Under the current law, it does require consent, and of course we have no choice but to follow current law.

 Ms. Berkley. Let me ask you a question. Sometimes people don’t 

always understand what their rights are and what their strengths 

are. Will both the servicemember and the family member who receives this notification understand that there is no consent required? 

It should be in bold letters on whatever notification form is used so 

that both the servicemember, the woman in this instance, knows that 

notification is going out to her estranged spouse, but that he doesn’t 

have to consent, and the estranged spouse ought to know that this is 

a courtesy notification from Uncle Sam and it doesn’t matter what 

his opinion is, because that could create some problems in a divorce 

situation.

 Dr. Jones. Ms. Berkley, your point is well taken. We will do everything possible to ensure that we notify the spouse or family member 

that it is notification only.

 Ms. Berkley. I appreciate that. I have one more quick question.

 Mr. Miller. You have 20 seconds.

 Ms. Berkley. Twenty seconds, all right. Your testimony suggests 

that only limited specified disabilities may qualify for the traumatic 

insurance payments.

 Does the law give the VA the authority to provide payments to severely disabled servicemembers who have extended periods of rehab, 

such as that recommended by USAA or only for the specific defined 

disability?

 Mr. Lastowka. Okay. Ms. Berkley, again I have not had the opportunity to review the USAA statement, but based on your description 

we believe that the VA in consult with DoD has the authority to define certain severe injuries based on the length of hospital stay, and 

that it would still have to come out of the traumatic injury and we 

have begun consultation with DoD on defining the disabilities that 

would be covered in addition to those in the law.

 Ms. Berkley. Okay, because you heard my example of the heart attack versus the shrapnel in the head, same result, incapacitation, but 

both received in the same action and both should be covered. 

 Mr. Lastowka. I have heard the example and I would say if the 

heart attack was as a result of traumatic injury, it would probably 

be covered. I am not sure if it was not the result of the traumatic 

injury.

 Ms. Berkley. I am not sure I like that answer, but others want to 

speak. Thank you very much.
19

 Mr. Miller. Mr. Bradley.

 Mr. Bradley. Thank you, Mr. Chairman. My office just had a case 

earlier this week of a reservist, I believe, who was wounded in Iraq. 

He’s about 50 years old, so obviously he had civilian employment, but 

he is still on active duty. He may not be a reservist, but it almost 

doesn’t matter.

 He’s wounded. He needs to have a handicapped bathroom installed 

in his home. There is a grant from the VA that allows him to do this, 

but as long as he is on active duty, my caseworkers have told me he 

can’t get the grant.

 What I want to know is under what we just passed in the supplemental, which as I understand it from your testimony today, there is 

a injury payment to somebody in this kind of circumstance where he 

is injured, disabled as a result of his service, why he is not evidently 

qualifying for it.

 I know you can’t talk on this particular case, but answer it in generalities, and then why, if that is not what Mr. Renzi’s bill is specifically 

designed to do, if what we passed in the supplemental doesn’t cover 

that kind of example, then why are you opposed to Mr. Renzi’s bill, 

which as I understand it from my questions to Mr. Renzi, would be 

over and above any benefit that somebody, whether he is active duty 

or a veteran, would have.

 Mr. Lastowka. Mr. Bradley, as I understood, you were talking 

about a person on active duty who received an injury who is not eligible for a grant.

 Mr. Bradley. Yes.

 Mr. Lastowka. I speculate that that is part of this specially-adapted 

housing program, which I believe therefore is open to veterans but 

not to active duty servicemembers.

 Under traumatic SGLI legislation, we would expect most of the 

payments will be going to active duty servicemembers, that compensation above any other benefit, this is an immediate cash payment 

going to somebody who was severely disabled, severely injured.

 Mr. Bradley. What would be the upper limit on that amount of 

money that someone injured in that category might be expected to 

receive?

 Mr. Lastowka. The payments will range between $25,000 and 

$100,000. Without know the specifics -- 

 Mr. Bradley. And I know that. I don’t either know the specifics. 

Are there criteria? There must be criteria.

 Mr. Lastowka. We are working with DoD already in setting up 

what those criteria are that will define disabilities -- $25,000, $50,000, 

$100,000.

 Mr. Bradley. And the legislation was retroactive back to right after 

September 11, 2001?

 Mr. Lastowka. That’s correct.
20

 Mr. Bradley. So this gentleman should qualify for award.

 Mr. Lastowka. That’s correct, sir.

 Mr. Bradley. Well, you will probably hear from my office then, because I want to make sure that this person -- you know, if Mr. Renzi’s 

bill was, as I understand it, designed to make sure that a person like 

this who needs a cash infusion to help him through the transition 

of not being able to earn the income and his family was accustomed 

to, and to pay the ancillary expenses, that what we just did in the 

supplemental is also designed for that, which is why he said it was 

redundant.

 I want to make sure that somebody in this case, which is a real life 

case in my district, is getting what he is supposed to be getting.

 Mr. Lastowka. Yes, Mr. Bradley, and of course if I knew the circumstances, I could -- 

 Mr. Bradley. Exactly, and I know that. That’s why we will be in 

touch with you. Thank you.

 Mr. Miller. Mr. Bradley, I would also ask that you contact Committee staff. I believe you will be pleased to know that the issue that 

you are talking about was corrected in December of 2003.

 Mr. Bradley. Okay.

 Mr. Miller. And so the information may be a little bit dated, so 

staff will assist you in that.

 Mr. Bradley. As always, Mr. Chairman, you are right on the ball, 

and I thank you.

 Mr. Miller. Mr. Evans.

 Mr. Evans. Thank you, Mr. Chairman. I was concerned about how 

we identify, or define I should say, a person serving in a combat operation, a zone of combat, who dies as a direct result of an injury or 

illness incurred for -- serving in combat. What I want to get to, and 

I know you are trying real hard for definitions in this bill, I think we 

need to figure out what that means, because in today’s warfare everybody almost is combat zone, and you can’t easily, I think, suggest 

that this person is and this person isn’t, so I would just wish that this 

-- you may not have formulated it, an issue on this, but I’d hope that 

you would look at this as we go through the legislative process.

 Mr. Miller. That we will. Definitely. We will take that into consideration in the process.

 Mr. Evans. Thank you.

 Mr. Miller. And appreciate your remarks. Mr. Udall?

 Mr. Udall. Thank you, Chairman Miller. Just a housekeeping

thing. I would like to put my opening statement in the record on this 

hearing.

 Mr. Miller. Without objection.

 [The statement of Hon. Tom Udall is on p. 53]
21

 Mr. Udall. Thank you for doing the hearing.

 I understand that the SGLI fund lost about $15 million last year 

because the Department of Defense did not deduct premiums for 

spousal coverage for all covered servicemembers.

 Are servicemembers with spousal coverage now having premiums 

deducted and paid to the VA?

 Colonel Penrod. Sir, if you don’t mind, I will take that.

 Yes, sir. We met with the services and part of the problem there 

was the fact that the member must register the military spouse in 

the Defense Enrollment Eligibility Reporting System (DEERS). and 

because the military member is a member in their own right, they 

would not normally do that.

 We met with the services. We asked the services to provide their 

plan on how all the members will in fact be paying premiums and 

that they in fact corrected this issue. That is due at the end of June, 

so we would be happy to present that information.

[In response to the request, the witness provided the following:

All Military Services have submitted a plan to identify and contact members who must register their military spouse in DEERS. 

Through a variety of public affairs tools including newspaper 

and magazine articles, e-mail messages, and Service-wide messages, each Service has committed to notifying affected members. In addition, each Service has received DEERS and personnel data which identifies members who are potentially affected. 

This data assists in determining the number of members who 

have yet to correct their DEERS files.

The Veterans Benefits Administration staff indicates that they 

have seen progress on the timely payment of monthly SGLI and 

FSGLI premiums and that they are working with points of contact at the various components and Defense Finance and Accounting Service (DFAS) to improve the reporting process.]

 Mr. Udall. Great. Thank you. So it is being deducted and being 

paid to the VA?

 Colonel Penrod. Yes, sir.

 Mr. Udall. Okay, thank you. Has the SGLI program received any 

comments from servicemembers who have concerns about being required to obtain the consent of an estranged spouse in order to make 

elections of SGLI?

 Mr. Lastowka. Yes. Under the current law, which would provide for 

the consent, we have received inquiries and complaints from servicemembers who are estranged from their spouses. Generally it starts 

off something like, ``That person left me and the kids and why should 
22

I need his permission?’’ We have received complaints like that.

 Mr. Udall. How many have you received?

 Mr. Lastowka. We have received in writing I think two that I am 

aware of. We received through Prudential’s Office of Servicemembers’ Group Life Insurance many other inquiries which you would 

have to characterize as taking the same vein. But I could not give 

you a count, sir.

 Mr. Udall. Okay. Thank you very much. Thanks, Mr. Chairman. 

Yield back.

 Mr. Miller. Thank you very much. We appreciate your comments 

this afternoon. Sorry we were a little bit rushed, but look forward 

to working with you as we attempt to perfect these important programs.

 At the same time as everybody moves from the table, we would like 

to ask the third group, which is our final panel, to come forward. Give 

you a little update on time. Looks like we are in probably a five-minute window of the call for the vote. As everybody knows, we have a 

little bit of time to get from here to the Capitol for the vote, but again, 

everybody at the table is distinguished in their own right, but with 

your permission the Chair would like to begin with a short introduction, but your full introduction will be entered into the record for all 

to be able to see on our award-winning website.

 Instead of introducing everybody at one time, what I would like to 

do is just begin and I will introduce each person as it is your time to 

speak.

 John Melia is the founder and Executive Director of the Wounded 

Warrior Project. I do want to say that this group was formed to give 

a voice and to assist severely injured servicemembers upon returning 

from the war on terror. So without further introduction, Mr. Melia, 

you are recognized. Thank you.

STATEMENTS OF JOHN MELIA, EXECUTIVE DIRECTOR,

 WOUNDED WARRIOR PROJECT; BRIAN LAWRENCE, ASSIS-

 TANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED

 AMERICAN VETERANS; JOHN BOLLINGER, DEPUTY EXE-

 CUTIVE DIRECTOR, PARALYZED VETERANS OF AMERICA;

 COLONEL (RET.) ROBERT NORTON, DEPUTY DIRECTOR,

 GOVERNMENT RELATIONS MILITARY OFFICERS ASSOCIA-

 TION OF AMERICA; BOB McDONALD, EXECUTIVE DIREC-

 TOR, LIFE/ANNUITY SALES, USAA

STATEMENT OF JOHN MELIA

 Mr. Melia. Brace and Charlene Feldbusch are types of parents we 

all wish we had. When they had learned that their son Jeremy had 
23

been severely injured on the Haditha Dam in the early stages of the 

war, they rushed to his side. Traveling from their home in Blairsville, 

Pennsylvania to Brooke Army Medical Center in San Antonio, where 

he was being treated. The news from the medical professionals was 

not good. The shrapnel had pierced Sergeant Feldbusch’s head above 

his right eye. He suffered loss of that eye, damage to 30 percent of the 

frontal lobe of his brain, and injury to the optic nerve on the left side, 

leaving Sergeant Feldbusch totally blind and struggling for his life.

 Questions like who will watch the kids at home, who will pay the 

mortgage, or will I lose my job never crossed Charlene and Brace’s 

mind. Their only thoughts were with their son, and rightfully so.

 Charlene and Brace’s story is not unique, and all too common. As 

we speak today, thousands of military families are experiencing the 

devastating emotional, financial, and physical impact of life with a 

severe traumatic injury.

 My name is John Melia. I am the founder and the director of 

the Wounded Warrior Project. Chairman Miller, Ranking Member 

Berkley, thank you so much for the opportunity to present testimony 

today on behalf of the some 15,000 military service men and women 

and their families that have been impacted forever by the injuries 

their loved ones sustained in service to our great nation.

 As previously mentioned, the Wounded Warrior Project was founded in 2003 to give a voice to this new generation of wounded military 

men and women returning from the current conflicts in Iraq and Afghanistan. We assist as they courageously face the unique issues and 

problems associated with life as a disabled veteran, and we aim to 

fill the vital need for a coordinated, united effort to enable wounded 

veterans to aid and assist each other and to readjust to civilian life 

with disability.

 Less than 18 months ago we were approached by Staff Sergeant 

Ryan Kelly, who was mentioned earlier in Congressman Renzi’s remarks, a soldier who had months earlier lost his right leg below the 

knee serving on the dangerous streets of Ramadi. Staff Sergeant 

Kelly had begun to notice his comrades’ and their families’ increasing 

financial strains associated with the trauma.

 Ryan approached the project with several ideas to address this 

problem. He would be with us today if he were not riding his bicycle 

across the country to raise awareness about wounded soldiers with 

three other men who walked these halls several months ago lobbying 

for this legislation.

 After reviewing several options, the project decided that a disability insurance program, which would make an immediate payment 

to families like the Feldbusches, would have the greatest impact. 

The project drafted proposed legislation and with the help of three 

wounded soldiers and their families we began to walk the halls of 

Congress in search of a sponsor.
24

 We visited Representative Rich Renzi and we found more than a 

sponsor. We found a champion for this cause. I wish he was here, so 

we could thank him appropriately.

 The project is extremely grateful to Congressman Renzi and his 

staff for their efforts. Congressman Renzi was the first elected official to support disability insurance for servicemembers by introducing H.R. 1618, the Wounded Warrior Servicemembers Group Disability Insurance Act of 2005.

 While this bill was under consideration in the House of Representatives, we were also working on a similar bill in the Senate cosponsored by Larry Craig of Idaho, Senator Larry Craig of Idaho, and 

Senator Daniel Akaka of Hawaii. The project worked with both the 

Department of Veterans’ Affairs and Senate Veterans’ Affairs Committee staff on the legislative language proposed by Senator Craig 

and Senator Akaka. This language passed as part of Public Law 109-

13.

 We are pleased to say that with the passage of this legislation we no 

longer believe that passage of H.R. 1618 is necessary. While the provisions of H.R. 1618 would structure the program differently, it would 

essentially create the same type of insurance coverage as Public Law 

109-13. Passage of this law created traumatic injury protection for 

all active duty servicemembers who were traumatically wounded.

 The coverage will pay a benefit of up to $100,000, depending on the 

severity of the injury and the payment will be made within days of the 

servicemember sustaining the injury and will support the soldier and 

his family during the long period of hospitalization and recovery.

 Our intent in seeking passage of this legislation was to help the 

convalescent soldier and, just as importantly, their families during 

the injured servicemember’s time of initial hospitalization and recovery. This period -- 

 Mr. Miller. You will hear a couple more in just a minute, but 

please continue.

 Mr. Melia. This period is often wrought with significant stress for 

the soldier and their family and lengthy rehabilitation often requires 

families like the Feldbusches to leave work for an extended period of 

time in order to be with their loved ones. The potential loss of income 

along with a variety of additional related expenses can spell financial 

disaster for the families.

 Although soldiers continue to draw pay while hospitalized, as we 

know, the pay is often inadequate to offset the additional expenses 

incurred by their families.

 The modern battlefield has also exposed an unprecedented number 

of National Guardsmen and Reservists to front-line combat. Many of 

them are working at significant pay reductions from what they were 

making at civilian jobs prior to active duty.

 Extended periods of hospitalization will prolong the amount of time 
25

they will be earning these reduced wages and significantly impact on 

their long-term solvency.

 The need to help families during this critical time before soldiers become eligible for VA’s benefits and disability compensation programs 

is undeniable. The new insurance program will be a bridge from the 

time of injury until the soldier is eligible for VA benefits. It will allow 

families the flexibility to put their lives on hold at a moment’s notice 

and be with their loved ones.

 From the standpoint of rehabilitation it ensures the newly-injured 

soldier can concentrate more fully on recovery and transition back 

into civilian life, rather than on the financial impact of the situation.

 Looks like my time is up. Can I continue? May I continue?

 Mr. Miller. If I could, I would like to go on to the other members.

 Mr. Melia. Okay.

 Mr. Miller. Again, your entire statement will be submitted to the 

record.

 Mr. Melia. Thank you so much.

 Mr. Miller. And I appreciate it.

 [The statement of John Melia appears on p. 70]

 Mr. Miller. I would like to introduce Mr. John Bollinger. He serves 

as Executive Director of the Paralyzed Veterans of America, and he 

has done so since 1992.

STATEMENT OF JOHN BOLLINGER

 Mr. Bollinger. Chairman Miller and members of the Subcommittee, I am John Bollinger, with Paralyzed Veterans of America, and I

am grateful that you have invited us to testify today. Thank you.

 I would like to focus my comments primarily on the Traumatic 

Injury Protection benefits already enacted in P.L. 109-13 and the proposed legislation in H.R. 1618.

 Obviously the provisions contained in the public law are already 

law and will to a large degree attempt to address the same problems 

that resulted in the proposed H.R. 1618. In both cases the financial 

wellbeing of a soldier with a catastrophic disability has been identified as a problem and is quite worthy of a solution.

 We fully agree that the problem exists, especially in this day and 

age when our fighting soldiers are somewhat older, often with spouses and families and jobs left behind, and often with mortgages and 

bills to pay.

 At first blush it would seem that any way we could get a quick 

influx of financial assistance into the hands of a family dealing first 

with traumatic, severe disability and, second, the stress of associated 

financial obligations, we should do it.
26

 The question, of course, is how best to resolve what is an extremely 

difficult, devastating situation for the soldier and his or her family. 

This is where PVA believes this legislation may be taking us down 

the wrong road and could set precedents undesirable for dealing with 

disability.

 We don’t believe, and this is kind of a philosophical point of view 

on our part, that an individual on active duty should be asked to pay 

even a small premium to help preserve their financial stability in 

the event they are catastrophically disabled while serving on active 

duty.

 We have seen several news releases praising the legislation and 

stating this benefit is self-funded and will cost taxpayers very little, 

if anything. It is really a quick fix and certainly an easy decision in 

our mind for DoD and VA.

 One release went on to say that as a result of the bill traumatic 

injury will not include the threat of bankruptcy for families of our 

soldiers. If our soldiers are going bankrupt, and clearly many are, 

because of traumatic injury, then I say shame on all of us. We have 

long urged to provide sufficient assistance for families of seriouslydisabled servicemen and women to help overcome the crushing burden of dislocation in their lives caused by these disabilities.

 Back on January 2nd I had the opportunity to spend the better part 

of an afternoon with a father and his son, who is a 20-year-old Marine 

who was the brand new recipient of a spinal cord injury. I have got to 

tell you that in my mind if the average American knew that that individual, that that 20-year-old Marine, was paying one penny to protect 

himself in the case of financial bankruptcy or financial hardship, I 

think you would probably have a protest in the halls of Congress.

 The Army has recently proposed recruiting bonuses up to $40,000. 

It would seem to me that if DoD is willing to pay upfront a premium 

to sign up new recruits they should also be willing to pay similar 

amounts to avert financial ruin among their own whose lives have 

been drastically changed by catastrphic disability while serving our 

country.

 We believe there are other solutions Congress may wish to consider 

to reinforce the Federal Government’s responsibility. One way would 

be to create a DoD disability gratuity much like the lump sum death 

gratuity. Another way would be to create additional tier of ``emergency pay’’ and allowances that are specifically for severely-disabled 

service men and women,.

 Once our government has fulfilled this obligation, we look forward 

to working with the Subcommittee to help craft a bill to provide additional protection should a serviceperson desire to have that coverage. 

Thank you.

 [The statement of John Bollinger appears on p. 82]
27

 Mr. Miller. Thank you very much. What I would like to do is, if 

there are no objections, ask that Colonel Norton and Mr. Lawrence, if 

you could both submit your testimony for the record.

 

 [The statement of Colonel (Ret.) Robert Norton appears on p. 92]

 [The statement of Brian Lawrence appears on p. 77]

 Mr. Miller. Thank you

 Mr. McDonald, since you traveled here today, if you could cut your 

comments to two minutes, again only because we are trying to get to 

the first vote. We all have questions that we want to enter into the 

record, and everybody’s statement again will go into the record in 

its full context and members will be allowed to enter questions into 

the record, but I would like to get Mr. McDonald’s testimony on the 

record, too, from USAA.

STATEMENT OF BOB McDONALD

 Mr. McDonald. Thank you, Mr. Chairman. Not only did I travel 

far, but I’m going to miss the Spurs’ game tonight.

 As you know, I represent USAA and we were founded in 1922 to 

serve members of the military and their families. I would like to 

thank you for allowing us to be a part of today’s hearing on these issues.

 We have supported the recent proposals to expand SGLI, the Traumatic Injury Protection, and the death gratuity. Members of the 

general public are largely underinsured according to common life insurance industry calculations, and this is particularly true for our 

military servicemembers.

 Increasing the coverage available via SGLI to $400,000 will provide a meaningful amount of resources to the surviving families of 

uniform personnel.

 Our suggestions on the appropriate SGLI structure emphasize providing critical education and assistance to personnel on important life 

insurance coverage decisions. Military members should understand 

the benefits of supplementing the Government’s group programs with 

private insurance coverage. The military should ensure that life insurance issues generally are emphasized in military financial education programs, and there should be some way to arrange for financial 

planning services for survivors upon receipt of SGLI and death benefits. There easily could be a combined effort between the Government 

and the private sector to deliver independent professional advice to 

help families avoid rash decisions in the wake of loss and to ensure 

that monies that they receive last for the long term.
(28)

 With regard to the role of the military spouse, we agree with Ms. 

Berkley. USAA supports requiring only notification and not consent. 

Private industry has no precedent set for consent requirements, and 

most state insurance codes generally dictate that as long as the owner and the insured of the policy are the same person it doesn’t matter 

who the beneficiary is.

 Switching to the disability programs, USAA feels this is an even 

more important role -- or topic for the Committee to consider. Today 

military personnel face very different hazards than in the past. With 

advancements in battlefield medical care, many of our servicemembers return from combat alive but not disabled, and we found that in 

the private sector -- we have looked into this type of coverage and we 

cannot provide it at an affordable rate for our members.

 USAA has several observations on the disability proposals. One 

important need is to clarify the SGLI coverage that qualifies a member to obtain disability coverage. We recommend that you don’t force 

the military member to take the full $400,000 of coverage just in order to have the disability rider attached to it.

 Other recommendations include calculating of benefits based on 

both anticipated rehab time and severity of injury, ensuring favorable tax status, making sure that benefit is not taxable, get a ruling 

from the IRS, and designating a private vendor similar to SGLI. I

think Prudential has proven that they can operate that type of a program -- so the private sector is the right way to go.

 Congress needs to be wary of adverse selection in the program. I

think this is an important part. If there are liberal provisions to allow coverage after an initial election not to participate, servicemembers will simply wait for deployment to enroll and pay premiums, 

which will substantially increase costs.

 Servicemembers should also receive significant education on the 

importance of the benefits and it’s vital that they understand the 

Government program and lack of availability of disability insurance 

in the private sector.

 I would like to thank you for your participation today, sir.

 [The statement of Bob McDonald appears on p. 98]

 Mr. Miller. I would like to thank you for your participation and everybody who was here today. I apologize to the other two presenters. 

If you would, please submit your testimony for the record. We will 

likewise give our questions for the record. I look forward to working 

with the Ranking Member and the members of this Committee on 

important legislation that we have heard about today, and without 

objection, statements from Operation Truth and the National Military Family Association will also be entered into the record.
29

 [The statement from Operation Truth appears on p. 104. The statement from the National Military Family Association was unavailable 

at press time.]

 Mr. Miller. With nothing further this hearing is adjourned.

 [Whereupon, at 2:19 p.m., the Subcommittee was adjourned.]
(30)

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